VA Tech Wabag sees 30% growth in bottom line for 2013

Chennai-based water and waste-water treatment companyVA Tech Wabag forecast a 30% growth in the current year's bottomline, more than then 12% rise it has achieved in 2011-12 excluding a one-time expenditure incurred the previous year.

The one-time expenditure of about Rs 12 crore was incurred in Q4 of 2010-11. Without taking that into calculation, VA Tech's net profit growth for Q4 of 2011-12 hardly grew at about Rs 60 crore. That's despite a jump of nearly a third in revenue to Rs 674 crore. That's because expenditure grew sharply by 36% to Rs 586 crore.

"We are guiding for a 20% growth in order book, 15-20% growth in revenue and 30% growth in bottom line," said Rajiv Mittal, MD of VA Tech.

Mittal ascribed the revenue growth in Q4 to a desalination project being implemented south of Chennai (at Nemmeli) and a water supply project in Sri Lanka (Dambulla). "With the new draft policy for water in India and improved Jawaharlal Nehru National Urban Renewal Mission, we see huge opportunities in India," he said.

Brokerage Bank of America Merrill Lynch said in a research report said that Rs 4,500 crore (20% of the market) of project awards in the water sector in the final quarter of FY12 have been pushed back to FY13. This, because of slow decision making, elections among other issues.

The company missed its order inflow guidance of Rs 1,900 crore for 2012, and ended up booking order worth Rs 1,774 crore.

VA Tech has now created a separate desalination vertical to bid for overseas opportunities.

A recent Ambit Capital report said the VA Tech has tie-ups with companies like Cobra (Spain) and Tedagua (Spain), which are leaders in desalination.

Shares of the company, which has Rs 400 crore cash on its book and is debt free, rose 8.77% to Rs 440.30 on the National Stock Exchange.